Mar 25, 2011

OIG Report On State Agency Furloughs

Social Security's Office of Inspector General (OIG) has issued a report on the Social Security Administration's response to furloughs of state employees who make initial and reconsideration determinations on disability claims for the agency. A number of states in financial difficulty have furloughed these employees even though their salaries and all other expenses are paid by the federal government. The reason always given for this is that the states want "to be fair to other state employees." I have extracted a chart from the report showing the numbers of cases involved per state and what Social Security has done in response. Click on the chart to see it full size.

Here is an interesting paragraph from the report (footnotes omitted):

SSA [Social Security Administration] explored other options to address the effect of State furloughs, such as contracting with private companies and federalizing the State DDSs [Disability Determination Services]. However, these options would likely involve legislative changes, as the Social Security Act, in effect, requires that most disability determinations be processed by State DDSs. Additionally, SSA estimated that federalizing the State DDSs would be more costly than the current framework—costing approximately $4 billion over the first 4 years.